Labor: NLRB finds at-will employment clauses live to see another day

Many employers across the country are well aware the general counsel for the National Labor Relations Board has taken unprecedented steps to renew the application of the National Labor Relations Act (NLRA) to unorganized workforces. Among the issues generating concern for all employers are recent efforts to target at-will employment language in employee handbooks as unlawful under the NLRA. Two advisory memoranda released at the end of October addressed this issue with surprising results.

The recent advisory memoranda examined the at-will employment handbook language of two employers and determined both were lawful under the NLRA. In the first, the employer’s at-will clause stated, “No representative of the Company has authority to enter into any agreement contrary to the foregoing ‘employment at will’ relationship.” In the second, the language at issue provided, “No manager, supervisor, or employee of [the employer] has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will. Only the president of the Company has the authority to make any such agreement and then only in writing.” Though different, similar analysis was applied to these clauses.

For each clause, the general counsel found that the lawfulness of the policy depended on whether employees would reasonably construe the language at issue to prohibit Section 7 activity. Among the rights granted by Section 7 of the NLRA, employees maintain the right to engage in concerted activities for the purpose of collective bargaining or other mutual aid and protection. At issue in the advisory memoranda cases were the ability of employees to act concertedly to change their at-will employment status. In each case, the general counsel found that although the ability to change at-will status was limited by the policy, it was not entirely prohibited. The clause from the second case described above, in fact, specifically provided that the president could change at-will status in writing.

The advisory memoranda stand in contrast to the opinion of an Administrative Law Judge (ALJ) examining different language and reaching the opposite conclusion in American Red Cross Arizona Blood Services Region, 28-CA-23443, from earlier this year. There, the employer’s employee handbook acknowledgement form included, “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” Relying on the same analysis as the recent advisory memoranda, the ALJ found this more restrictive language waived the employee’s right to engage in concerted activity for the purpose of changing his or her at-will employment status. Unlike the language approved by the advisory memoranda, this language examined by the ALJ did not provide or infer an alternative to at-will status that could be achieved through concerted activity.

The classic lesson for employers examining this issue is to never say never. Handbook language that completely curtails the possibility of an employee taking any action to change his or her employment at-will status is likely going to be interpreted as unlawful by the general counsel and regional offices. As the advisory memoranda make clear, employers can still limit the ability or means of employees to change their at-will status without running afoul of the NLRA. The best course may be to provide how such status can be changed after stating the ways in which it cannot be changed. However, as with many of the recent efforts of the National Labor Relations Board to regain prominence among nonunion workforces, these developments are unlikely to be the last word on this issue.

Employers should stay informed and consult counsel well-versed in this area of the law to address questionable handbook language.

Contributing Author

Mark Spognardi

Mark Spognardi is a partner at Arnstein & Lehr. He focuses on representing management in traditional and non-traditional labor and employment law matters, including counseling,...